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Air India Sale: Tata Likely to Get Maharaja, What's In Offing For 16,000 Air India Employees

The government has essentially agreed to bearing the cost of liquidation loss on account of transfer to the Employees' Provident Fund Organisation (EPFO).

The government has essentially agreed to bearing the cost of liquidation loss on account of transfer to the Employees' Provident Fund Organisation (EPFO).

Home Minister Amit Shah and a group of other ministers got together last week to decide the release of the budgetary support in order to meet said demands.

Tata Sons has finally won the bid for the national air carrier, Air India, according to a Bloomberg report. With this, the privatisation is finally going through and the wait is over. This comes on the back of a panel of ministers accepting the conglomerate’s proposal to take over the airlines, the report mentioned. It is also expected that an official announcement is set to follow soon. Speaking of big changes for the airlines, the Central government has also agreed in principle to the Air India employees’ demands out of fear that anything else would cause industrial dissension and could prove a major hurdle in the process of privatising the airlines, a Business Standard report said.

With Tata Sons emerging as the leading bid in the process, the divestment is set to kick off in a few days. This is history coming full circle as it was JRD Tata who founded the airlines in 1932 under the original name Tata Airlines.

The government has essentially agreed to bear the cost of liquidation loss on account of transfer to the Employees’ Provident Fund Organisation (EPFO) from company-owned trusts, the inclusion of employees in the central government health scheme (CGHS), and encashment of leaves.

It was reported that a ministerial panel of the airlines has agreed to most of the demands. However, if need be, then the budgetary support would be provided before the transfer of the ownership took place, said the Business Standard report.

Home Minister Amit Shah and a group of other ministers got together in August to decide the release of the budgetary support in order to meet said demands the report mentions. It was also reported by Business Standard that the total outgo is projected to be around Rs 250 crore. It would seem that the government is looking to wrap up the sale and transfer of Air India by the end of the year the report indicated.

The government had earlier stated in November of 2019, that the interests of Air India employees would be safeguarded in accordance with the guidance of the Department of Investment and Public Asset Management, Union Minister Hardeep Singh Puri said in a statement. This statement was issued after there were several concerns expressed to the Civil Aviation Ministry about the potential sustained employment of the employees after the airlines underwent its strategic disinvestment.

Puri had rejected reports at the time that showed several airlines pilots of the carrier were leaving the airlines as their salaries were not being paid on time. He defended saying that the Air India pilots are very well looked after and their salaries in relation to what the airlines were offering were very good.

He went on to say that there would be no job losses in Air India till privatisation took hold. He said that in relation to the employees’ health cover and the situation at the time, moved them to secure a better deal that was favourable for all employees.

On Thursday, the Central government asked the Air India employees to vacate the company-provided accommodations within six months of completion of the ongoing divestment process, according to reports. However, it should be noted that there was a meeting earlier in August by the Air India Specific Alternative Mechanism (AISAM), which decided that employees could continue to stay in the lodgings for six months or till the property was monetised. Employees have been given a total of 15 days from the date of the letter being issued to submit an undertaking for the peaceful handover of the accommodations.

On media reports around Tata Group winning bids for Air India, the secretary of DIPAM said, “Media reports indicating approval of financial bids by Government of India in the AI disinvestment case are incorrect. Media will be informed of the Government decision as and when it is taken.”

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first published:October 01, 2021, 13:18 IST